Houston-based Oceaneering International announced plans to acquire Lafayette’s C&C Technologies for approximately $230 million in cash.
C&C is an international provider of surveying and mapping services to the land and offshore oil and gas industry (mostly deepwater), telecommunications industry and government organizations. Oceaneering is also a global provider of engineered services and products primarily serving the deepwater oil and gas industry.
The announcement comes amid the collapse in crude oil prices, which have lost about 60 percent of their value since mid-2014, leading to a wave of expected mergers. The West Texas Intermediate price for March delivery rose 26 cents Monday, Feb. 2, the day the C&C deal was announced, to $48.50 a barrel.
C&C, which last year ranked No. 18 on ABiz’s list of the Top 50 Private Companies in the region, reporting $123 million in 2013 revenues, offers ocean-bottom mapping services in deepwater. Founded by brothers Thomas and Jim Chance in 1992 (who got their start with their father’s surveying company, John E. Chance & Associates), the local company uses autonomous underwater vehicles and provides marine construction surveys for both surface and subsea assets, as well as satellite-based positioning services for drilling rigs and seismic and construction vessels. C&C also offers land and near-shore survey services along the U.S. Gulf Coast and in Mexico and performs shallow water conventional geophysical surveys in the Gulf.
According to a Feb. 2 press release from Oceaneering (NYSE:OII), the transaction is anticipated to be completed in early April 2015. Over the following year, Oceaneering expects the acquired business to generate $20 million to $30 million of earnings before interest, taxes, depreciation and amortization (or EBITDA), before integration costs, and be accretive to earnings. Oceaneering plans to include C&C’s financial results in its Subsea Projects segment.
M. Kevin McEvoy, president and chief executive officer of Oceaneering, called the transaction “a unique opportunity to strategically expand our service line capabilities and underwater service offerings.” He said C&C’s services are used in all major phases of an offshore field life cycle, particularly in exploration and development, and are highly complementary with Oceaneering’s products and services. Among the benefits of the transaction, according to McEvoy, are increased use of Oceaneering’s remotely operated vehicles and vessels to support survey services; enhanced ability to secure subsea asset integrity work on pipelines, including x-ray and ultrasonic inspections that could pull through additional demand for tooling and pipeline repair systems; and increased demand for video and data solutions services.
“We are looking forward to the contributions that the more than 550 C&C personnel will make to our operations and growth," McEvoy says. "In addition, we expect to achieve cost savings and revenue synergies as we integrate C&C’s operations and bring its services to new markets by leveraging our extensive international footprint.”
Thomas Chance, co-founder and president of C&C, has agreed to remain with the company for at least a year to facilitate a smooth transition. “The two companies are very complementary and synergistic,” Chance says in a separate press release. “This will translate into stronger service lines for more clients worldwide. C&C and Oceaneering will certainly be a technical and operational powerhouse on a global basis.”
C&C Technologies says it will retain its name and continue to be based in Lafayette. Its corporate headquarters at 730 E. Kaliste Saloom Road, C&C has offices worldwide in Houston, Seattle, Singapore, Brazil, Mexico, South Africa, Thailand, Angola, the United Kingdom and India, according to its website.
Oceaneering says it expects to issue 2014 year-end earnings Feb. 11, at which time it will update its overall 2015 outlook.